Natural Gas Price Forecast – Natural Gas Continues to See $3 as Crucial

Natural Gas Technical Analysis

The natural gas markets continue to be very noisy as we hang around the crucial $3 level. The $3 level of course is an area that a lot of people pay close attention to due to the fact that it is a large, round, psychologically significant figure, and an area where you would expect to see a lot of options barriers.

When you think of the natural gas markets, you really need to be paying close attention to the United States because there’s about a 99% chance that the contract that you were trading is either based in the United States or it’s a CFD that is an amalgamation of a couple of months’ worth of pricing in the futures markets in America. So, with that being said, there was the disruptive factor of Helena, the hurricane, that had a bit of an influence on production and distribution, but that seems to be going by the wayside for the most part.

The other thing to keep in mind is that we are heading towards cooler temperatures in the United States. And that of course, is bullish for natural gas overall. But you also have to keep in mind that it’s a very fluid situation. It literally will be based on the weather report for the next few weeks. As things stand right now, I think this remains a buy on the dip type of situation.

But you also have to be very cautious with your position sizing, because natural gas is probably one of the most volatile markets that I follow at times. I certainly don’t have any interest in shorting this market, and I do think it’s worth paying special attention to any pullback closer to the $2.80 level.

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